Companies need better finance functions to catch the next wave of growth

UK companies need to overhaul their finance functions or suffer competitive disadvantage as the
economy recovers and growth opportunities return, says PwC’s Finance Effectiveness Benchmark study, published tomorrow. 

The annual review of over 200 companies’ finance functions shows how less than half of financial
professionals believe their company’s financial forecasts are reliable. 

Andrew McCorkell, director, PwC said:

“Technological and management advances of recent years have enabled the best finance functions to become real-time sources of insight to the business, and more are on a mission to achieve this. In the current climate, an out of date or poorly performing finance function will cost a company dearly in terms of innovation and growth.” 

Middling finance functions are running at 60% higher cost to businesses than top performers, with the best performing companies often employing outsourcing and shared service centres to drive down costs. Median budget reporting times have shortened by 14% this year thanks to improvements in technology and automation. The cost of finance functions remains highest within the financial services industry, running at around 1.48% of revenues for the median quartile
compared to 0.86% of  for the top. 

The report also notes the need for many financial professionals to change their mindset round what they do. 

Brian Furness, partner, PwC, said:

“Moving into new markets, disruptive technologies and the demands of a new generation of digital
customers are just some of the mega-trends informing and transforming businesses today. Finance needs to advise and assist decision makers, and to participate in those decisions. 

“We are seeing finance as a discipline change from a technical challenge to an adaptive challenge.
Businesses need to facilitate this transformation of skills and talent by building effective teams that will support them through recovery and into growth.”

Notes to editors:

Unlocking Potential: Finance effectiveness benchmark study, 2013 contains in-depth case studies including Pacific Gas and Electric;Beckton, Dickinson and Company; British and American Tobacco; Skandia; Jaguar Land Rover and Corning. 

Additional comments from Brian Furness:

"In today's economic environment Finance's role in helping the business navigate through change is increasingly important, as are developing the skills necessary to communicate with new groups of interested stakeholders. Connectivity is also an issue for companies with global reach and operating
models, presenting challenges of resilience and control.

“The focus is not just on reducing cost, but reaching a balance between the cost of finance and the benefit that can be attained from an appropriately equipped finance team at the heart of the business.”

Read more about the future of finance and PwC four principles of best practice here

http://www.pwc.co.uk/finance/finance-matters/insights/finance-function-of-the-future.jhtml

Andrew Smith
PwC | Communications
Direct: +44 (0)20 7213 1216 | Mobile: +44 (0) 7841 491180
Email: [email protected]